Hejaz Group, a global Islamic Finance provider, has launched Australia’s first ever Sukuk active exchange-traded fund (active ETF), enabling investors to access a Shariah-compliant bond alternative product for the first time.
The Hejaz Sukuk Active ETF (Managed Fund), will be available on the ASX from 2 November 2023. The Hejaz Sukuk Active ETF (Managed Fund) (ASX:SKUK) will enable retail, wholesale and institutional investors in Australia and New Zealand to invest in a shariah-compliant fixed-income asset that is comparable to a traditional bond ETF.
Unlike traditional bonds which derive yield from debt interest, Sukuk are financial certificates that appreciate as the value of the underlying asset grows. Sukuk are issued in global markets and structured to comply with Islamic law, with investor returns considered to be profit sharing rather interest. Under shariah principles, the earning or payment of interest is not permitted.
Managed by Hejaz Asset Management, the Hejaz Sukuk Active ETF (Managed Fund) is comprised of a diversified portfolio of Shariah-compliant Sukuk investments from the Bloomberg Global Aggregate USD Sukuk Index. Hejaz Asset Management is targeting a return of 8 per cent per annum, after fees.
Also read: Sukuk Investments Attracting Global Interest
Hakan Ozyon, CEO, Hejaz Group said: “Hejaz was founded to give Australian Muslims the opportunity to grow their wealth without compromising their beliefs, by giving them access to world-class halal financial products. The Hejaz Sukuk Active ETF (Managed Fund) fills a substantial gap in the market by enabling Muslims and non-Muslims to access an ultra-ethical fixed-income product – considered a defensive asset – for the first time. Alongside our equities and property ETFs, and new account-based pension offering, our Sukuk Active ETF shows Hejaz is fulfilling our promise to support Muslims’ financial needs with first and best-in-class products.”
The global Sukuk market was valued at USD 915 billion in 2022 and is expected to reach a value of USD 2.3 trillion by 2028, based on a predicted cumulative annual growth rate (CAGR) of 16.2% from 2023 to 2028.i
Equity Trustees will be trustee for the Hejaz Sukuk Active ETF (Managed Fund), with Apex Financial Services Group acting as administrator and custodian, and Nine Mile as the market maker.
Andrew Campion, GM, Investment Products, ASX, said: “Our vision is to ensure that there are a broad range Investment Products available on ASX that enable investors and their advisers to construct quality portfolios. The Hejaz Sukuk ETF is an excellent example of broadening the choice that investors have in the Australian market”.
Hejaz currently has $1.3 billion in funds under management and advice. Its Global Ethical Fund is Australia’s largest standalone Islamic fund, while the Hejaz Equities Fund (Managed Fund) (ASX:ISLM) and Hejaz Property Fund (Managed Fund) (ASX:HJZP) were the first Islamic finance products to be quoted on the ASX. In September 2023 it launched the Hejaz Islamic Super and Pension, the first Islamic account-based pension to be offered to Australian consumers directly.
